Six Sigma for Managers. 2 www.exploreHR.org Contents : Six Sigma : An OverviewSix Sigma : An Overview What is Six Sigma?What is Six Sigma? Why Six Sigma?Why

Six Sigma for Managers

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Contents :Six Sigma : An OverviewWhat is Six Sigma?Why Six Sigma?Six Sigma Phases : Define, Measure, Analyze, Improve and ControlTools and Key Roles for Six Sigma

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Why Six Sigma?

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What is Sigma ?Sigma A term used in statistics to represent standard deviation, an indicator of the degree of variation in a set of a process

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What is Six Sigma?Six SigmaA statistical concept that measures a process in terms of defects at the six sigma level, there 3.4 defects per million opportunitiesA philosophy and a goal : as perfect as practically possibleA methodology and a symbol of quality

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Sigma Level

Sigma Level (Process Capability)Defects per Million Opportunities2308,537366,80746,210523363.4

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Sigma LevelSix Sigma = 99,9997%

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Sigma LevelEvery hour the postal service would lose 20,000 pieces of mailEvery day our drinking water would be unsafe for almost 15 minutesEvery week there would be 5,000 surgical operations that go wrong in some wayEvery month we would be without electricity for almost seven hoursWhy not Four Sigma or 99.379% ?

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Why Six Sigma?MoneyCustomer SatisfactionGrowthQualityCompetitiveAdvantageEmployee Pride

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At GE, Six Sigma added more than $ 2 billion to the bottom line in 2000 aloneMotorola saved more than $ 15 billion in the first 10 years of its Six Sigma effortAlliedSignal reports saving $ 1.5 billion through Six Sigma.Why Six Sigma?

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Why Six Sigma?Six Sigma is about practices that help you eliminate defects and always deliver products and services that meet customer specifications

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Cost of Poor QualityWhat is cost of scrap?

What is cost of rework?

What is cost of excessive cycle times and delays?

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Cost of Poor QualityWhat is cost of business lost because customers are dissatisfied with your products or services?What is cost of opportunities lost because you didnt have time or the resources to take advantage of them?

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Critical-to-Quality (CTQ)Elements of a process that significantly affect the output of that process. Identifying these elements is figuring out how to make improvements that can dramatically reduce costs and enhance quality.

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Six Sigma Phases

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DefineMeasureAnalyzeImproveControlSix Sigma PhasesD M A I C

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DefineMeasureAnalyzeSix Sigma PhasesDefine the project goals and customer (internal and external) deliverables

Measure the process to determine current performanceAnalyze and determine the root cause(s) of the defects

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ImproveControlSix Sigma PhasesControl future process performanceImprove the process by eliminating defects

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Six Sigma PhasesDefineDefine Customers and Requirements (CTQs)Develop Problem Statement, Goals and BenefitsIdentify Champion, Process Owner and TeamDefine ResourcesEvaluate Key Organizational SupportDevelop Project Plan and MilestonesDevelop High Level Process Map

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Six Sigma PhasesMeasureDefine Defect, Opportunity, Unit and MetricsDetailed Process Map of Appropriate AreasDevelop Data Collection PlanValidate the Measurement SystemCollect the DataBegin Developing Y=f(x) RelationshipDetermine Process Capability and Sigma Baseline

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Six Sigma PhasesAnalyzeDefine Performance ObjectivesIdentify Value/Non-Value Added Process StepsIdentify Sources of VariationDetermine Root Cause(s)Determine Vital Few x's, Y=f(x) Relationship

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Six Sigma PhasesImprovePerform Design of ExperimentsDevelop Potential SolutionsDefine Operating Tolerances of Potential SystemAssess Failure Modes of Potential SolutionsValidate Potential Improvement by Pilot StudiesCorrect/Re-Evaluate Potential Solution

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Six Sigma PhasesControlDefine and Validate Monitoring and Control SystemDevelop Standards and ProceduresImplement Statistical Process ControlDetermine Process CapabilityDevelop Transfer Plan, Handoff to Process OwnerVerify Benefits, Cost Savings/Avoidance, Profit GrowthClose Project, Finalize DocumentationCommunicate to Business, Celebrate

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DefineMeasureAnalyzeImproveControlDeliverables :Fully trained team is formed, supported, and committed to work on improvement project. Team charter developed, customers identified and high impact characteristics (CTQs) defined, business process mapped.

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Checkpoints for ReadinessTeam Readiness :Team is sponsored by a champion or business leader.Team formed and team leaders assigned. Improvement team members fully trained on Six Sigma and DMAIC.

DefineMeasureAnalyzeImproveControlTeam Charter :Completed project management charter, including business case, problem and goal statements, project scope, milestones, roles and responsibilities, communication plan.

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DefineMeasureAnalyzeImproveControlCheckpoints for ReadinessCustomersCustomer(s) identified and segmented according to their different needs and requirements.Data collected and displayed to better understand customer(s) critical needs and requirements.Business Process MappingCompleted, verified, and validated high-level 'as is' (not 'should be' or 'could be') business process map.Completed SIPOC representation, describing the Suppliers, Inputs, Process, Outputs, and Customers.

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DefineMeasureAnalyzeImproveControlDeliverables :Key measures identified, data collection planned and executed, process variation displayed and communicated, performance baselined, sigma level calculated.

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DefineMeasureAnalyzeImproveControlCheckpoints for ReadinessKey Measures IdentifiedKey measures identified and agreed upon.High impact defects defined and identified in the business process.

Data Collection Planned and ExecutedSolid data collection plan established that includes measurement systems analysis.Data collected on key measures that were identified.

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DefineMeasureAnalyzeImproveControlCheckpoints for ReadinessProcess Variation Displayed/CommunicatedProcess variation components displayed/communicated using suitable charts, graphs, plots.Long term and short term variability accounted for. Performance Baseline/Sigma CalculationMeasure baseline process performance (capability, yield, sigma level).

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DefineMeasureAnalyzeImproveControlDeliverables :Data and process analysis, root cause analysis, quantifying the gap/opportunity.

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DefineMeasureAnalyzeImproveControlCheckpoints for ReadinessData and Process AnalysisIdentify gaps between current performance and the goal performance. Root Cause AnalysisGenerate list of possible causes (sources of variation).Segment and stratify possible causes (sources of variation).Prioritize list of vital few causes (key sources of variation).Verify and quantify the root causes of variation.

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DefineMeasureAnalyzeImproveControlCheckpoints for ReadinessQuantifying the Gap/OpportunityDetermine the performance gap.Display and communicate the gap/opportunity in financial terms.

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DefineMeasureAnalyzeImproveControlDeliverables :Generate (and test) possible solutions, select the best solutions, design implementation plan.

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DefineMeasureAnalyzeImproveControlCheckpoints for ReadinessGenerating (and Testing) Possible SolutionsPossible solutions generated and tested.

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DefineMeasureAnalyzeImproveControlCheckpoints for ReadinessSelecting The Best Solution(s)Optimal solution selected based on testing and analysis.New and improved process ('should be') maps developed.Cost/benefit analysis of optimal solution(s).Small-scale pilot for proposed improvement(s). Pilot data collected and analyzed.Improved process ('should be') maps modified based on pilot data and analysis.Project impact on utilizing the best solution(s).

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DefineMeasureAnalyzeImproveControlCheckpoints for ReadinessDesigning Implementation PlanSolution implementation plan established, including schedule/work breakdown structure, resources, risk management plan, cost/budget, and control plan.Contingency plan established.

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DefineMeasureAnalyzeImproveControlDeliverables :Documented and implemented monitoring plan, standardized process, documented procedures, response plan established and deployed, transfer of ownership (project closure).

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DefineMeasureAnalyzeImproveControlCheckpoints for ReadinessMonitoring PlanControl plan in place for sustaining improvements (short and long-term). Process StandardizationNew process steps, standards, and documentation are ingrained into normal operations.

Documented ProceduresOperating procedures are consistent.Knowledge gained on process is shared and institutionalized.

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DefineMeasureAnalyzeImproveControlCheckpoints for ReadinessResponse PlanResponse plans established, understood, and deployed. Transfer of Ownership (Project Closure)Transfer ownership and knowledge to process owner and process team tasked with the responsibilities.

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Tools and Roles for Six Sigma

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Creating flowcharts of the step in a process operations, decision points, delays, movements, handoffs, rework, loops, and controls or inspections. A process map is illustrated description of how a process work.To